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  1. Default Latest Fed Announcement Is Not What Investors Want to Hear

    Just when you thought that the Fed had embraced a new dovish demeanor, the hawks come out of hiding and swoop down on stocks, oil and gold.

    I am referring here to the bizarre turnaround in so-called “Fed speak” that we’ve seen this week, as four Fed officials came out to say that the April Federal Open Market Committee (FOMC) meeting could see an interest rate hike.

    Yes, they said the Fed could hike rates as soon as the April meeting, which is less than a month from now.

    The reason this is so strange is that it was just last week that Fed Chair Janet Yellen gave the bulls some red meat via one of the most dovish FOMC statements and “dot plots” we’ve seen in a long time.

  2. Default

    Last week, the Fed reduced its expectations for rate hikes this year down to just two from the anticipated four. This week, Fed officials are out there telling the world that they would have hiked in March, had there not been so much global turmoil.

    These are the kind of mixed messages that the market abhors, so it’s no wonder that we saw a sell-off in stocks, oil and gold, along with a rise in the dollar.

    Not that the Fed had a whole lot of credibility built up in my mind during the past decade, but this nearly schizophrenic Fed reversal of sorts is the kind of thing that investors don’t need to grapple with right now.

  3. Default

    Still, the reaction in markets this week has been unambiguous — and that’s translated into the aforementioned declines in stocks, oil and gold. The charts below tell the story of the latest action in all three asset classes.


  4. Default

    In the weeks ahead, I suspect we’ll know if the rally we’ve seen in stocks, oil and gold is for real, or if it’s just a head fake in a wider corrective market.

    It is too early to tell here, but what we can say is that stocks and gold remain in a confirmed uptrend, and both continue to trade above their respective 200-day moving averages.

    Oil almost made it past the 200-day moving average, but there’s strong resistance at that level, and it’s going to take a lot more positive news from OPEC on the production front to drive the price of crude higher from here.

  5. Default

    Still, things remain bullish for stocks and gold, and that means you can take advantage of these trends — if you know the right way to do it, and if you have the right technical tools at your disposal to get you out of these markets if things do turn south.

    If you’d like to get on board and ride the current trends in the market, then my Successful ETF Investing advisory service is aimed right at you.

    ETF Talk: Take Advantage of Demographic Trends with This Global ETF

    Emerging markets have had a difficult year, but an end to that trend could always be around the corner. When emerging markets do turn upward, they may well soar due to their greater likelihood of growth compared to stocks in more developed countries. One exchange-traded fund (ETF) that offers a way to tap such potential upside is EGShares Emerging Markets Consumer ETF (ECON).

 

 

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